GRA chides media over “shakeup” report; relies on its tax collection record

Last Updated on Thursday, 13 August 2015, 15:46 by GxMedia

The Guyana Revenue Authority (GRA) on Thursday chided sections of the media that suggested that there could be a shake-up at the country’s tax collection agency and said the records show that it has meeting its targets., following remarks made by Finance Minister Winston Jordan in his budget speech.

“Unfortunately the GRA noted certain sections of the media taking Minister’s remarks out of context with speculations about retention at the Authority’s top brass, perhaps seeking to besmirch the image of the GRA,” said the authority in a statement.

Instead, the GRA welcomed Jordan’s emphasis on the Authority as a key source of revenue now that Guyana has benefitted from substantial debt forgiveness under the Highly Indebted Poor Countries Initiative (HIPC) and the Multilateral Debt Relief Initiative (MDRI).

“The Authority noted that the Minister elaborated on the need to strengthen and enhance the organisational and managerial capacity of the GRA with a focus on reviewing its current operational standards so that they are in line with international best practices; a move that is welcomed by the management of the GRA.

The GRA’s comments about the media were based on the Finance Minister’s observation that the tax agency has been politically compromised and that huge tax waivers had been granted under the People’s Progressive Party Civic-led administration that lost power in May.

“A diagnosis of the problems and challenges facing the entity shows: heavy top management of the authority, coupled with low staff morale and a lack of succession planning, both vertically and horizontally.

Further, the authority lacked transparency and accountability, as it was politically compromised under the previous administration. Policies and procedures were poorly enforced, and there was limited intelligence gathering. Further, the cost of conducting transactions was high, which often led to involuntary compliance,” said Jordan, a former Budget Director at the Ministry of Finance.

However, the GRA defended its record in meeting tax collection targets generally: “ Each year the GRA is entrusted with the task of collecting a large portion of the revenue and save for a few shortfalls, it has been adequately prepared to meet the targets set out. The record achievements in revenue collection by the GRA over successive years stand testimony.”

The GRA congratulated the Finance Minister on his inaugural Budget presentation and  said it looked forward with optimism to the realisation of the Government’s vision for a new and improved tax Agency that promises quality service delivery and efficient revenue collection.

Note was made of the plans outlined by the Minister for strengthening of the GRA’s mandate in the near future and more particularly the important role the Authority plays as a revenue earner for the state.

In his 2015 budget presentation, on Monday, August 10, Minister Jordan said “The Guyana Revenue Authority (GRA) contributes the bulk of revenues intended for the Consolidated Fund. As a result of declining external inflows to Guyana, due in part to debt relief given under the Highly Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI), the GRA has assumed added importance over the last decade in generating resources to meet Government expenditure programmes. This role will expand, in the medium term, as the Government accelerates its programmes and projects to enable Guyanese to experience the good life.”

In anticipation this year, officers of the GRA’s Planning and Analysis Department and the Ministry of Finance were educated on revenue forecasting by the Caribbean Regional Technical Assistance Centre CARTAC).

The Finance Minister announced that steps would be taken to strengthen GRA’s organizational and managerial capacity in a sustainable manner. “In this regard, we will constantly review the current operational standards and bring them in line with international best practices, train a core staff to manage the Authority, and build a new ethos that emphasizes service delivery and efficient revenue collection. The expectation is that when the tax reforms are fully implemented, this capacity strengthening will compensate for the decline in foreign inflows.”

The Government of Guyana (GoG) collected $135.9 billion in revenue from tax collections for the year 2014, $37.5 billion of which was from the collection of Value-Added Tax.

The amount represents 93.9 percent of all revenue earned by government for that year. According to Jordan, VAT collections “rose by 9 percent to $37.5 billion largely on account of better administration that resulted in arrears of $2.7 billion being recouped.”

He said that internal revenue increased to 9.8 percent to $5.1 billion, particularly due to “increased collections from private sector companies and a $2.7 billion increase in personal income tax from the Pay As you Earn (PAYE) category.”

Jordon also shared that “excise tax collections increased by 3.5 percent to $28.2 billion”, while “Customs and trade tax collections totaled $13.5 billion, an improvement of 2.1 percent.”

Meanwhile, Jordan said, “there was a decrease of $581.6 million from withholding tax collections associated with the contraction in the gold mining sector.”